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Paul Nelson Fargo, ND 701-277-0042 605-221-6034 866-461-9111
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Boy is it hard to write about all the possibilities of financing. It depends on the person's credit, where they bank, the amount of down payment they have and where they want the home. I would strongly suggest that you call me to discuss your personal situation. I have written about contract for deed financing, National bank financing, hometown bank financing and the role of co-signers. I have done my best but it is still complicated. Please take a few minutes to read about it if you have the time and patience. Otherwise, give me a call, we can dissect your own situation to see what will work for you. Contract for deed Financing What is contract for deed financing? Contract for deed financing is where the owner of the home is also the person financing the home. They may or may not have a minimum credit score standard. Most of the time they do not. Most of the time it is the park where the home is located who is offering the contract for Deed. They may overlook bad credit if it is in the past. You must have a down payment. The payments are set up for a loan period with payments going to principal and interest just as if the loan had been processed by a bank.
Contract for deeds through Nelson Homes. I generally do not offer any contract for deeds except through the parks. I have had a few (very few) individual sellers that have agreed to sell on a contract for deed. Contract for deeds are clearly marked as such. If they are not marked, under no circumstances will a contract for deed be acceptable to the seller. I am sorry but we generally do not have many contract for deeds unless it is financed by the park. They do come out but generally sell very quickly. Under no circumstances will a contract for deed be allowed to move to another site.
National Bank Financing I have bank financing through 21st Mortgage and Triad finance companies. The down payment, and interest rates are determined by your credit score. The higher your credit score, the lower your interest rate and down payment will be. They will generally approve everybody. A person with a low credit score could see 35% down payment requirement. A person with a high credit score could see a 5% down payment. The more you put down the less your interest rate. There are a few other methods of financing that is a lot cheaper. Hometown Bank financing This works most of the time if you have a relationship with the bank. Many banks say that they do not do manufactured home loans. Manufactured home loans that are on rented property are not a real estate loan and not a car loan due to the fact that you live in it. There is certain paperwork that has to be done differently than a car loan because it is being lived in. Many banks do not want to train all their people to do this type of loan for a relative small demand for such a loan. It is just to worth the training time. Many of the bigger banks are like that. Wells Fargo, US Bank, State Bank of Fargo, Gate City, etc. They frankly do not make enough money on them to be worth the training. Most of the smaller hometown banks will require a larger amount of down payment. Co-signers If you have a co-signer that is willing to help you, there are a couple of things that can be done. First of all, a co-signer will not generally help out with poor credit. They will only help where there is a lack of credit. If you have poor credit, they will generally not want you on the loan. It will go 100% on the strength of the co-signer. I have seen many circumstances where somebody says that they will co-sign but when it comes to when it actually has to be done, they run for the hills. Frankly, they talk big until it comes time to actually help, then they get cold feet. i have seen that happen most of the time. It is easy to say that they will co-sign. It is a lot tougher to do it. If you can't tell, I am frustrated with that. They tell someone that they will co-sign, the person gets their hopes up, then they pull the rug out from under them. Frankly, that is very cruel. I hope they will read below to see what a co-signer's responsibility really is. There are a couple of ways to help for a helpful co-signer. First of all, it is on the co-signer's financial ability to secure a loan. The person that needs help will be a bystander. The best way to do it, depends on the financial stability of the co-signer. Best option. If you have an certain amount in the bank, you can borrow against that. With this way the bank will not use the manufactured home as collateral. If you have say, $50,000 in the bank and you were going to borrow $30,000 for a manufactured home, $30,000 of the $50,000 would be pledged to the loan. As the loan is paid down, less money is subject to the loan. If you put an extra principal payment, it would be subtracted by the loan. You could put the loan in the name of the person that is needing help so they can raise their credit score. This is the cheapest method to finance a home. The bank charges 3 to 3 1/2% for interest on the loan above the rate that you have in savings. If your savings rate is 1%, your interest rate would be 4% to 4 1/2 %. You can set the payment at any amount that you want. It is generally tied to the maturity of the CD. The co-signer still gets their rate of interest on their CD. Talk to your banker, they can explain it better than I can. This is the best method since the person that has poor credit can start making a good credit history. Eventually if they perform well, they won't need a co-signer again. If the person can secure a loan down the road, sell it , etc. The loan would be paid and all the money would be released as collateral. If they paid it down at tax time, more of the money would be released as collateral. This is the best and cheapest way to help a person. Option 2. A person if they have equity in their home, they could take out a home improvement loan on the property. This can be discussed with your banker. Again, the manufactured home will not be used as collateral. These 2 methods are for the people who are truly trying to help someone. I don't blame anybody if they do not want to co-sign for someone. It is a large responsibility. The lender is looking at the co-signer all the way. If the co-signer is on the hook, why not try to leverage your assets (your credit record, your saving account or your home) to do what you want to do for the least amount of cost. You are responsible for the loan no matter how you do it. Option 3. Friendly banker who knows you and will make you a loan like any other loan. This is the most common way of co-signing that I see. Financing with land That the home will be put on. Click here for on land that is owned by you or that you are going to be buying.
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